Saipan casino operator Imperial Pacific International (IPI) lost over half-a-billion dollars in 2019 as VIPs — particularly those that owe IPI money — steer well clear of the property.
Figures released Wednesday by the Hong Kong-listed IPI show the company generated revenue of just over HK$539m (US$69.5m) in 2019, representing an 83.4% decline from 2018’s result. Gross profit fell 89% to HK$319.8m, resulting in an after-tax loss of HK$3.94b (US$508.2m) for the year.
Last year’s losses marked a significantly worse showing than 2018’s $378m net loss, while the company’s 2019 revenue was 15% below the roughly $82m profit the company booked in 2017. Suffice it to say, things have been better in IPI world.
As usual, IPI’s woes begin and end with its VIP market. While 2019’s mass market table and slots revenue of HK$249.6m was only around 6% below 2018’s tally, VIP gaming revenue fell by more than 91% to HK$253.8m, barely eclipsing the mass market figure, as turnover tumbled 89% to just HK$14b.
IPI has yet to strike any significant deals with junket operators, meaning the company is largely responsible for offering credit to high-rolling gamblers. This also means that IPI is responsible for collecting on its VIP markers, a task the company has so far proven woefully incapable of managing.
IPI’s total outstanding VIP markers stood at nearly HK$9.1b at the end of 2019, of which the company chose to write off nearly HK$7b as uncollectable. Over HK$2.7b of these writeoffs were owed by IPI’s ten largest debtors, of which the largest deadbeat owed nearly HK$1.1b.
On the plus side, 2019’s write-offs mean the current outstanding debt is only HK$2.1b, less than half of the sum that IPI still hoped to recover at the end of 2018 so, you know, progress.
The COVID-19 pandemic forced IPI to shut its gaming operations in mid-March, which on one hand means the company is no longer taking on any more VIP gambling debt but it’s also generating no revenue.
Sadly, it also means that the Commonwealth of the Northern Mariana Islands’ government faces an even tougher challenge convincing IPI to make good on its estimated $37m in outstanding community fund contributions.
